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Posted March 26, 2013 | comments Leave a comment

Front Royal tax rates to remain fixed

By Alex Bridges

Tax rates will remain the same in Front Royal for the next year despite a last-ditch effort to cut the levy.

Town Council voted at its regular meeting Monday to leave the real estate tax rate at 11 cents per $100 of assessed value. They also voted to keep the personal property tax rate at 64 cents per $100 of assessed value. The level of relief from the personal property tax will decrease from 70 percent to 67 percent.

The motion passed 4-1 on its second and final reading.

Councilman Thomas H. Sayre made the first motion to set a real estate tax rate at 10 cents per $100 of assessed value. Sayre's motion also sought to keep the personal property tax rate at 64 cents per $100 of assessed value. Sayre proposed keeping the rate of relief from personal property tax at 70 percent rather than reduce the benefit to 67 percent of the first $10,000 of the assessed value of vehicles as advertised.

Councilman Daryl L. Funk seconded Sayre's motion.

As Mayor Timothy W. Darr explained, the council previously approved on first reading a real estate tax rate of 11 cents per $100 of assessed value -- the current levy. Council also had approved personal property tax relief at 67 percent.

Vice Mayor N. Shae Parker asked if Sayre could explain his reasons for making the motion. Sayre said he responded to comments by Councilman Bret W. Hrbek and resident Tim Ratigan on ways to promote economic development and thought keeping tax rates low would help the town meet this goal. Sayre commented that the town increased its real estate tax rate over the years but thought a reduction may help residents.

However, Hrbek didn't sound supportive of that idea.

"Are we prepared to cut our expenses again, or are we going to put it on a credit card like we did three years ago because we don't have enough revenue coming in," Hrbek asked.

Town Manager Steven Burke said he based his proposed fiscal 2014 budget on a real estate tax rate of 11 cents. Reducing the rate by one cent means approximately $105,000 less revenue for the town, Burke said. Keeping the level of relief from personal property tax at 70 percent rather than cut it to 67 percent would reduce revenue by $20,000.

"Which means we're going to have to make some tough cuts again," Hrbek chimed in.

Hrbek noted that some members of council did not support cuts several years ago and, as a result, the town borrowed money from electric utilities fund. Hrbek expressed support for leaving the rate unchanged.

Parker said he supported a previous rate increase because the town eyed the extra revenue for specific purposes -- including the proposed Leach Run Parkway -- that he considered an economic boost for Front Royal. Parker said funds also were used to build a connector road through the former Avtex site and to pay for a study of the town's space needs.

Funk, an opponent of the collector road, said the town shouldn't pay for the route until a developer can do the project when the Environmental Protection Agency hands over the property to the local parties. Funk noted that he supported lower taxes.

"I've often said we need to focus on core services and I certainly think this motion reflects that," Funk said.

Councilman Eugene R. Tewalt questioned the point of lowering the tax rate by a penny.

"If we are determined to cut the budget then, when this budget comes in we need to cut it, whether we drop it to 10 or we leave it at 11 [cents]," Tewalt said. "That's our biggest problem: We've got a New York City pocketbook, or we think we do, but we've got a Front Royal budget and we can't do that."

Tewalt warned against raising the tax rate late in the budget-making process. He added that council could look at lowering the rate next year.

Parker sought to amend Sayre's motion to keep the tax rate at 11 cents and reduce the personal property tax relief level to 67 percent.

Hrbek claimed that Sayre has opposed any proposed cuts in spending. At the same time, Hrbek said, Sayre has tried to get the town to impose a tax on cigarettes. Hrbek accused Sayre and Funk of posturing as proponents of tax cuts but doing so without thinking of the consequences.

Burke said reducing the personal property tax relief from 70 to 67 percent does not affect the individual payers so much as it does the amount reimbursed by the state to the town.

Parker's amendment passed 3-2. Sayre and Funk voted against the amendment. However, council voted 4-1 to approve the entire motion as proposed by Sayre. Funk voted against the motion.

Councilman Hollis W. Tharpe did not attend the meeting. Sayre and other members noted that Tharpe had suffered a medical condition.

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com

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